Greece faces pressure to accept deal

GREECE and Europe raced to scrape together a last minute debt deal for Athens yesterday and avoid a catastrophic Greek exit from the eurozone a day after talks ended bitterly.

Greek borrowing prices soared and the euro sank against the dollar hours after the government refused a demand by eurozone partners that it apply for an extension to its European Union (EU) bail-out.

Eurogroup head Jeroen Dijsselbloem, who is also Dutch finance minister, on Monday gave Greece 48 hours to request the extension to the bail-out programme that expires at the end of the month, a demand that Athens bitterly refuses.

“The 18 ministers were absolutely agreed on the matter, it’s the most reasonable way, the first signal must come from the Greeks,” said Mr Dijsselbloem, the morning after the talks broke up after only two hours.

Monday’s meeting was the second time in a week that talks among eurozone ministers ended in acrimony amid accusations by Greece that Mr Dijsselbloem, backed by Germany, had torpedoed deliberations with “absurd” demands.

“There was a compromise deal, but it was sunk by Mr Dijsselbloem, presumably on German pressure,” Greek Deputy Foreign Minister Euclidis Tsakalotos said. A government source said Greece “will not accept ultimatums”.

Despite the bitterness, Greek Finance Minister Yanis Varoufakis said the different sides would find agreement in time to set up a meeting for Friday.

“We know in Europe how to deliberate in such a way to create a very good solution, an honourable solution out of initial disagreements,” he said. Negotiations would “achieve a very good outcome for the average European, not ( just) for the average Greek, average Dutch person, or the average German.”

The chaos surrounding the debt talks alarmed analysts, with economists at Commerzbank now predicting that a Greek exit from the euro was 50% likely, up from 25%.

“After the eurozone finance ministers again failed to find an agreement with Greece today, the euro membership of the country hangs in the balance,” it said in a note.

Greek Prime Minister Alexis Tsipras swept into power last month on a promise to tear up the bail-out agreement, all the while keeping the country in the 19-member eurozone.

“We’re reaching crunch time for Greece and the eurozone and I’m here to urge all sides to reach an agreement,” UK Finance Minister George Osborne said. “Not having an agreement would be very severe for economic and financial stability.”